Not end of the road for WTO, says India

02 Aug 2014


India on Thursday said it has submitted a counter proposal that would address developing countries' concerns over the WTO move to implement the Bali deal, in part, by leaving out proposals relating to agriculture and food security.

Nirmala SitharamanNew Delhi also sought to dispel fears that 31 July was the dead-end for WTO – that there are still ways to break the deadlock over the trade facilitation agreement (TFA), if only the developed countries ease undue pressure on developing and poor countries and listen to reason.

"We have made a new proposal to WTO," commerce secretary Rajeev Kher said late on Thursday, adding that this was within the "broader contours of what we had proposed earlier". He did not elaborate.

He also sought to counter the high-voltage campaign by developed countries that collapse of the Bali agreement would be a death blow to the WTO, saying, "The Bali deal won't collapse if we do not sign the trade facilitation by tonight."

US Secretary of State John Kerry on a visit to India also said it was possible to accommodate India's concerns within the Bali framework, but he won't let go the TFA initiative.

"We do not dismiss the concerns India has about large numbers of poor people who require some sort of food assurance at subsistence level. But we believe there is a way to provide for that, that keeps faith with the WTO Bali agreement," he said. "So we are obviously encouraging our friends in India to try to find a path here, where there is compromise that meets both needs."

India's proposal was a counter to the one sent by WTO director general Roberto Azevedo on Wednesday that was more of a detailed timeline for a permanent solution to the food security issue rather than a solution itself.

"That is not acceptable to us. We want something concrete, hence have sent a counter proposal, which has substance," said a commerce department official, without disclosing details.

"Our proposal is a solution, if they accept it. We are talking of substance, they are talking of process. There is some gap. They believe that July 31 is a dealbreaker, we do not believe that. We have made a very compelling proposal," said the official.

"Our stand remains the same," commerce and industry minister Nirmala Sitharaman had told reporters earlier on Thursday after meeting US Secretary of Commerce Penny Pritzker who accompanied Kerry for the annual strategic dialogue with India, hoping that a deal would be reached.

New Delhi has been seeking a permanent solution to the issue of public stockpiling for food security because the current WTO rules cap subsidies at 10 per cent of value of total production, that too at 1986-88 prices. This is a crucial issue concerning lives of millions of poor in India and other developing and poor countries and needs to be solved first before addressing any trade issues.

The country buys rice and wheat from farmers at a higher support prices to provide a reasonable income to producers and stockpile it to provide food to the poor at heavily subsidised prices.

India has been insisting that it would not agree to the TFA unless the entire Bali package, which includes allowing developing countries to buy food from farmers for food security needs, is simultaneously firmed up.

India had suggested the complete package could be sewn up by 31 December, in time for the 31 July 2015 deadline for the rollout of trade facilitation.

On the other hand, countries that clamour for early implementation of TFA say a deal would speed up global trade by reforming customs procedures and cutting red tape, resulting in a $1-trillion increase in annual world trade. 

Meanwhile, developed countries tried to pressure India saying that other countries could go ahead with the agreement and that a deal can be hammered out even if New Delhi did not change its stance.

They also warned that India will lose the 'peace clause' available to it under the Bali agreement that says no member can take action against another on the food subsidy issue till a final agreement is reached, the deadline for which is the 11th ministerial in 2017.

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